Yen-buying intervention of 15.39 trillion yen is largest on record, yen falls back to 160 range

Japan conducted yen-buying intervention of 15.3993 trillion yen from July 30 to August 26, the largest monthly amount on record, and the cumulative total for this year exceeded 27 trillion yen, also breaking the annual record. Even so, the yen fell back to the 160 range against the dollar, and U.S. Treasury Secretary Bessent defended the intervention, saying disorderly yen moves could raise U.S. borrowing costs. The Nikkei average edged higher on semiconductor gains, Sony Music became the top shareholder of GungHo, while the 10-year JGB yield is expected to remain at elevated levels around 3%.

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Yen-buying intervention of 15.39 trillion yen sets monthly record, also breaks annual record The Ministry of Finance announced on the 28th that the yen-buying/dollar-selling intervention from July 30 to August 26 totaled 15.3993 trillion yen, the largest monthly amount on record, and the cumulative total for this year exceeded 27 trillion yen, surpassing the 2024 annual record. Even so, the yen has fallen back to the 160 range, and the effect of the intervention is showing signs of fading in about four weeks. 1 2 3

Bessent warns disorderly yen moves could raise U.S. borrowing costs In a letter to senators, the U.S. Treasury secretary defended the yen-buying intervention at the end of July and warned that disorderly moves in the yen exchange rate could lead to higher borrowing costs for U.S. households and businesses. He explained that the intervention used foreign currency assets from the Exchange Stabilization Fund and involved no credit extension to Japan. 4 5 6

Japan's 10-year JGB yield near 3%, elevated levels expected to persist A report from the International Finance Center analyzed that the 10-year yield will remain at elevated levels around 3% for the time being, against the backdrop of expectations for additional Bank of Japan rate hikes, concerns over fiscal and JGB supply-demand conditions, and supply-demand pressure from reduced bond purchases. The release of the year-end budget and bond issuance plan will be the next turning point. 7

Sony Music invests 28.6 billion yen in GungHo, becomes top shareholder Sony Music Entertainment announced on the 28th that it has formed a capital and business alliance with GungHo Online Entertainment, the maker of Puzzle & Dragons, acquiring a 22.9% stake for 28.6 billion yen and becoming the top shareholder. The two companies will consider joint game development and new projects utilizing Sony-affiliated IP. 8

Nikkei average rises 0.4%, closes at 66,405 led by semiconductor-related stocks On the Tokyo market on the 28th, the Nikkei average extended its gains, closing at 66,405.56 yen. Advantest rose 1.9% and supported the index, but upside was limited by inflation concerns and anticipation of the Fed chair's remarks. 9